Competition: UK Competition authorities approve Zipcar Inc's takeover of Streetcar, Ltd

According to the Competition Commission (CC) "The acquisition, which was completed in April 2010, brings together Streetcar, the largest car club in London, and Zipcar, the second largest. Car club members pay an annual membership fee and are able to hire cars by the hour picking up the vehicle from convenient nearby locations, using the flexibility offered by smart card technology and online and mobile booking tools."

That sounds suspiciously like someone's marketing material.

But the CC did in fact look into the deal and the relevant market: chairman of the Zipcar/Streetcar Inquiry Group, Dr Peter Davis, said "This is a carefully weighed decision but the evidence we have seen of credible expansion by existing players and plans by new entrants into this market means that we have provisionally concluded that the right answer in this case is to clear the merger. Industry estimates have car club membership numbers increasing eightfold over the next decade so this is a fast-growing and therefore potentially attractive market for new and expanding providers, particularly in London. The competition we expect from new and expanding companies will prevent the merged company from exploiting its position and damaging customer interests in the medium term."

So the principle established here is that a monopoly or near monopoly position is acceptable in the UK provided that the CC is satisfied that the barriers to entry are not so severe that no new entrants can arrive and - although this is very nebulous and one wonders where the Commission has obtained independent information to support this contention - the market is expected to grow.

Whilst representations may be made before the final report, there is only a matter of a few weeks in which to make comments.